M.Geetha Rani,, Hyderabad vs Assessee

M. Geetha Rani, Hyderabad. vs. Income Tax Officer, Ward - 12(3), Hyderabad PAN - AIPPM 4467 J (Appellant) (Respondent)

Assessee by : Shri V. Raghavendra Rao Revenue by : Shri Rajat Mitra

Date of hearing 23-03-2015 Date of pronouncement 01-04-2015

O RDE R

PER SAKTIJIT DEY, J.M.:

This appeal by assessee is directed against the order dated 20/02/2013 passed by ld. CIT(A)-II, Hyderabad for the AY 2009-10.

2. The only issue involved in the present appeal is with reference to addition of an amount of Rs. 60 lakhs at the hands of assessee.

3. Briefly the facts are, assessee an individual was a director in M/s BPR Infrastructure Ltd. and derived income from salary. For the AY under consideration, assessee filed her return of income on 31/07/2009 declaring income of Rs. 4,41,636. At the time of assessment proceeding, on verification of the informations available on record, AO found that assessee was maintaining three bank accounts as under:

1. SB Account No. 867810110002627 - Bank of India 2 ITA No. 711 /Hyd/2013 M. Geetha Rani

2. SB Account No. 129510025020748 - Andhra Bank, Attapur Branch

3. SB Account No. 01/00019264 - Andhra Bank, Nampally Branch.

When AO called upon assessee to explain the source of cash deposits made in the bank accounts, assessee submitted, all the transactions including cash deposits in the bank accounts were relating to Smt. Baddam Kalavathy and the said person has also admitted the same before AO in course of her assessment proceeding and accordingly these deposits/withdrawal in the bank accounts were considered at the hands of Smt. Baddam Kalavathy while completing the assessment in her case by ACIT, Central Circle - I, Hyderabad. In support of such submissions, assessee submitted a letter dated 06/09/2010 filed before ACIT, Central Circle - 1, Hyderabad in course of assessment proceeding incase of Smt. Baddam Kalavathy wherein the SB A/c No. 867810110002627 with Bank of India, Attapur Branch was mentioned. On the basis of the submissions made by assessee, AO called for information from the concerned AO, who assessed Smt. Baddam Kalavathy and as stated by AO, the concerned AO i.e. ACIT, Central Circle - 1, vide letter dated 07/12/2011 confirmed that cash deposits in SB A/c of Bank of India, Attapur and Andhra Bank, Attapur Branch have been considered at the hands of Smt. Baddam Kalavathy while completing assessment u/s 153A of the Act. However, AO observed that as far as bank account in Andhra Bank, Nampally Branch is concerned, the concerned ACIT, Central Circle - 1 did not confirm the fact that the amount deposited therein was considered at the hands of Smt. Baddam Kalavathy. AO further observed, even in the explanation furnished by Smt. Baddam Kalavathy in course of assessment proceeding relating to her, it was never mentioned that the deposits in Andhra Bank, Nampally Branch account are her income and was offered as undisclosed income. He also observed in the assessment order passed in case of Smt. Baddam Kalavathy there is no mention of the deposits made in SB A/c 3 ITA No. 711 /Hyd/2013 M. Geetha Rani

held in Andhra Bank, Nampally Branch and whether it has been considered at the hands of Smt. Baddam Kalavathy. Therefore, AO treating cash deposits of Rs. 60 lakhs made into the SB A/c Andhra Bank, Nampally Branch as unexplained added the same to the income of assessee. Being aggrieved of such addition, assessee preferred appeal before ld. CIT(A).

4. In course of hearing of appeal before ld. CIT(A), assessee reiterated the submissions made before AO. Ld. CIT(A) after considering the submissions of assessee in the context of materials available on record, confirmed the addition with the following observations:

"6.1 Neither in the assessment order nor in the letter filed by Smt. B. Kalavathy, the details of the bank accounts of various parties whose income has been offered were furnished. It was only as a general statement it was mentioned that the cash deposits appearing in the name of Smt. Geetha Rani were made out of the cash on hand held by her. It may be noted that no where the details of the bank accounts and what amounts were taken into account for the purpose of the assessment before the ACIT, Central Circle -1. I have been furnished and the very fact that the ACIT, Central Circle - 1, vide letter dtd. 07/12/2011 confirmed that the cash deposits in the savings bank accounts of Bank of India and Andhra Bank, Attapur Branch have been considered in the assessment u/s 153A of Smt. B. Kalavathy clearly shows that the amounts appearing in the savings bank account of the appellant with Andhra Bank, Nampally Branchg have not been considered as the income of Smt. B. Kalavathy in her hands. Even during the appeal proceedings before me also, neither Sri B. Prakash Reddy nor his wife Smt. Kalavanthy substantiated the claim of the amount appearing in this particular account as being their income and the same has been offered to tax, with any evidence. The very fact that Smt. B. Kalavathy had offered the amounts appearing in the other two account as her income in her assessment and not owning up the amount appearing in this particular account shows that the amount of Rs. 60 lakhs appearing in account No. 01/00019264 with Andhra Bank, Nampally branch is unaccounted and therefore has to be taxed in the hands of the account holder i.e., the appellant. Accordingly, the addition made by the AO of Rs. 60 lakhs towards unexplained cash deposit remained unexplained and is therefore confirmed."

4 ITA No. 711 /Hyd/2013 M. Geetha Rani

5. Ld. AR submitted before us, during the assessment proceeding assessee herself has offered an explanation about the source of deposits into the SB A/c and has also explained that the said accounts though stood in the name of assessee, but, the transactions therein were made by Smt. Baddam Kalavathy. It was submitted, in course of assessment proceeding of Smt. Baddam Kalavathy, she owned up the deposits made in the SB A/c held in the name of assessee and accordingly, income was assessed at her hand. Ld. AR submitted, when AO has found assessee's claim in respect of two SB A/cs. to be correct, there is no reason why assessee's explanation in respect to the remaining account should not be accepted. It was submitted, only because there is no reference to the said bank account either in the assessment order or the explanation submitted by Smt. Baddam Kalavathy it will not follow that the amount was not assessed at the hands of Smt. Baddam Kalavathy. Ld. AR submitted, in fact, during the assessment proceeding of the present assessee, Smt. Baddam Kalavathy confirmed that the cash deposits made in SB A/c at Andhra Bank, Nampally Branch were actually made by her and she has offered it as income at her hands. In this context, ld. AR referred to the letter dated 14/12/2011 of Smt. Baddam Kalavathy, a copy of which is at page 10 of the paper book. Ld. AR, thus, submitted, when assessee has discharged her onus in proving the source of cash deposits into the bank account, AO is not justified in treating it as unexplained cash deposits. It was submitted, if at all any addition is warranted, it should be made at the hands of Smt. Baddam Kalavathy and not assessee. In support of such contention, ld. AR relied upon the following decisions:

1. CIT Vs. Durgaprasad More, 82 ITR 504

2. CIT Vs. P.K. Noorjahan, 237 ITR 570

3. Dwarkadhish Sugar Industries Vs. ITO 23 Taxmann.com (TM)

Ld. AR also relied upon the Third Member decision of ITAT, Delhi Bench in case of Zuari Leasing & Finance Corpn.Ltd. Vs. ITO, [2008] 5 ITA No. 711 /Hyd/2013 M. Geetha Rani

112 ITD 205 (Delhi)(TM) to submit that the Tribunal should decide the issue on merit in stead of remitting the matter to AO. Further ld. AR relied upon a decision of ITA, Mumbai Bench in case of Vijay Kumar Sarda Vs. DCIT, 40 Taxmann.com 113 (Mum.) to contend that appellate authority can only give direction to AO in regard to assessee before him and not in respect of third person, whose appeal is not pending before the appellate authority.

6. Ld. DR, on the other hand, strongly supporting the reasoning of the AO as well as ld. CIT(A) submitted before us, there is nothing on record to suggest that the deposits made in the Andhra Bank, Nampally Branch account were offered by Smt. Baddam Kalavathy at her hand in her assessment proceeding. He submitted, as assessee has failed to bring any material on record to prove this fact, addition made is justified.

7. We have considered the submissions of the parties and perused the orders of revenue authorities as well as other materials on record. There is no dispute to the fact that incourse of assessment proceeding, AO found three Savings Bank accounts standing in the name of assessee. It was explained by assessee before AO that the deposits/withdrawals made in the said SB A/cs were actually relating to Smt. Baddam Kalavathy and not assessee. It was further stated by assessee before AO that in the assessment proceeding of Smt. Baddam Kalavathy, she had accepted the transaction in the aforesaid bank accounts and the same were offered as additional income. However, as can be seen, assessee's aforesaid explanation were found to be correct only in respect of SB A/c held in Bank of India and Andhra Bank, Attapur Branch. Whereas, as far as SB A/c held in Andhra Bank, Nampally Branch is concerned, informations supplied by concerned AO, who made assessment in case of Smt. Baddam Kalavathy did not confirm the fact that the deposits in Andhra Bank, Nampally Branch account were also considered in the assessment completed u/s 153A of the Act in case of Smt. Baddam Kalavathy.

6 ITA No. 711 /Hyd/2013 M. Geetha Rani

There was also no other material on record which can either prove or confirm the fact that the deposits/withdrawals made in Andhra Bank, Nampally Branch account were considered at the hands of Smt. Baddam Kalavathy while completing the assessment in her case.

8. When there is no dispute to the fact that cash deposits to the extent of Rs. 60 lakhs were found in a bank account standing in the name of assessee, primary onus is on assessee to prove the source of such deposits with supporting evidence. In the present case, observations made in the assessment order as well as in the order of ld. CIT(A) clearly demonstrate that assessee has not been able to establish the fact that deposits of Rs. 60 lakhs were either offered as income by Smt. Baddam Kalavathy or was assessed in her hands. Even before this forum also, apart from a copy of letter dated 14/12/2011 claimed to be of Smt. Kalavathy, assessee has not been able to prove the fact that cash deposits of Rs. 60 lakhs were either offered by Smt. Baddam Kalavathy as her income or were assessed at her hands by furnishing any conclusive and cogent evidence. Moreover, as can be seen, it is the claim of assessee that the amount of Rs. 60 lakhs was deposited by Smt. Baddam Kalavathy in cash in assessee's bank account and subsequently the entire amount was returned back to her by way of self-withdrawals. However, on a perusal of the bank account copy, it is found that cheques for Rs. 9 lakhs and Rs. 8 lakhs were issued to one Shri K. Nitya Reddy on 10/06/08. Therefore, assessee's explanation that entire amount was paid back to Smt. Baddam Kalavathy through self withdrawals is also not correct. In these circumstances, when assessee has failed to establish the fact that the cash deposits of Rs. 60 lakhs actually belonged to Smt. Baddam Kalavathy and assessed at her hand, addition, in our view, is justified. As far as the decisions relied upon by assessee are concerned, on careful examination, they were found to be factually distinguishable. Suffice to say, the ratio laid down in these decisions are on the basis of the facts involved therein and will 7 ITA No. 711 /Hyd/2013 M. Geetha Rani

not apply uniformly to all cases. In the facts of the present case, as assessee has failed to bring any evidence on record to conclusively prove the fact that the cash deposits of Rs. 60 lakhs made into the Andhra Bank, Nampally Branch account was actually made by Smt. Baddam Kalavathy and assessed at her hands, assessee's claim cannot be accepted. Accordingly, we uphold the order of ld. CIT(A).

8. In the result, assessee's appeal is dismissed.

Pronounced in the open court on 1 st April, 2015.

Sd/- Sd/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER

Hyderabad, Dated: 1 st April, 2015 kv

Copy to:-

1) M. Geetha Rani, C/o I.R. Rao & Company, CAs., C-69, Madhuranagar, Hyderabad - 500 038

2) ITO, Ward - 12(3), Aayakar Bhavan, Basheerbagh, Hyderabad 3 CIT(A)-II, , Hyderabad

4) CIT-I, Hyderabad

5) The Departmental Representative, I.T.A.T., Hyderabad.

Description Date Intls 1. Draft dictated on Sr.P.S. 2. Draft placed befor e auth or Sr.P.S Draft pr opose d & placed bef ore the secon d AM 3 Mem ber 4 Draft discussed/appr oved b y second Mem ber VP 5 Appro ved Draft com es to the Sr.P.S./PS Sr.P.S. 6. Kept for pro nou ncem ent on Sr.P S. 7. File sent to the Bench Clerk Sr.P.S. 8 Date on which file go es to the Head Cle rk 9 Date of Dispatch of or der